Isn’t the moving of bad assets off books, or into a holding company the same thing that Enron did until it collapsed under its own weight of illegality? The maze of shadow companies that eventually came to light showed the insolvency of Enron which led to the biggest bankruptcy in American history. Now, we’re planning on doing the same kind of shenanigan with the bad assets from those who either knowingly took on too much debt, or those who were promised they could manage their weight. Both were wrong and now banks are being nationalized in a manner.
I believe this trend will continue for another year, and the stock market will continue to decline, but my target is purely the waving of my magic wand. I think the bounce won’t happen until the DOW hits around 6800 which means another 1000 points. But will do a rapid climb to 8500-8900. Then a much more measured growth rate since the financial system has been bitten so badly. Derivative markets are done, speculation driving up prices won’t happen again.
I’ve been watching the market, and it is getting hammered right now with all stock metrics down, the DOW [which I hate as a metric, but the world has anointed as the de facto measure of economic success] is down nearly 400 points. The DOW, in my estimation, has been correcting for the over-exuberant growth caused by futures traders and speculators in general. The more grounded investors do both technical and fundamental analysis. Smart investors sock their money away in companies they believe will grow and produce benefits for not just the pocketbook, but also for society, and by smart, I mean ethical investors.
Where do we go from here? Probably more nationalization.
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